The IMF has conducted in a working paper an analysis of vulnerabilities and possible regulatory responses to the digital asset sector.
In this, the experts have proposed a crypto-related risk assessment matrix (C-RAM) for countries to identify indicators and triggers of potential threats in the sector.
In addition, the objective of the tool also includes summarizing possible regulatory responses to the identified problems.
According to the matrix, the assessment process includes using a decision tree to assess the potential impact on the macroeconomy and studying indicators comparable to those used to monitor TradFi. In addition, it covers global macro-financial risks that influence the assessment of systemic threats.
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The authors of the paper have used the example of El Salvador to demonstrate the use of the matrix. They have concluded the legalization of Bitcoin created market, liquidity and regulatory risks.
The paper states:
"The use of crypto assets in El Salvador could also be assessed as a macrocritical as recent regulatory and legal changes entail the risk of substantial cryptoization in the country, undermining financial stability and affecting the large remittances and other capital inflows."